More than ever before, people today have the convenience to pick from a wide variety of efficient options to avail and pay off credit. One such form of credit that has stood the test of time even as various forms of payments emerge around it, are credit cards. Be it making purchases or paying for bills, credit cards offer a convenience that is uniquely appealing. However, there is an essential question that credit card holders must consider, is there a thing as too many credit cards? Can holding multiple credit cards affect your CIBIL score?
What is CIBIL Score?
A CIBIL score is essentially a summary of your creditworthiness, expressed in a three digit score. This score is a direct reflection of your overall credit history, the data for which is calculated and consolidated by the Credit Information Bureau (India) Limited, or CIBIL when you avail any form of credit. The CIBIL score ranges between 300 and 900, and the closer the score is to the latter figure, the better it reflects on your credit history. It is best to keep a regular track of your score, such as by opting for a free CIBIL score check at the Finserv MARKETS platform.
Why Would Holding Multiple Credit Cards Affect Your CIBIL Score?
CIBIL scores are calculated based on a number of different parameters that all tie in to your credit-related activities. It takes into account not only the type and number of credit options you avail but also your history of repaying credit-related debts and its timeliness. It also considers how often you have inquired, applied or been rejected for credit by an institution. All of these have a bearing on what your final CIBIL score comes out to be.
Hence, as a credit applicant, you can hold a number of credit cards if you choose to do so. This does not directly have an impact on your CIBIL score. However, as mentioned above, your CIBIL score would be affected by how these credit cards are being utilised as well as whether their associated debts are being paid off in time. If your credit score falls too low, you might even fall short of the requirements of most personal loans in the market. To be certain, however, make sure to check the personal loan eligibility calculator before proceeding with a loan application.
It is more likely that the more the number of credit cards you hold, the harder it will become for you to keep a check on all their associated payments and to make them on time. It can certainly be done with the right discipline and preparation. However, for the most part, it can prove to be quite a task. More importantly, any missed payment or a frequent high credit utilisation can spell doom for your CIBIL score.
It is, therefore, recommended to keep only as many credit cards as your discipline and financial habits allow, in order to keep the chance of maintaining a healthy CIBIL score. It is also a good idea to inculcate good credit practices such as regularly opting for free CIBIL score checks, making debt payments on time and avoiding multiple credit applications. This will also allow you to easily meet eligibility for various personal loans, which can be confirmed by the personal loan eligibility calculator available on the Finserv MARKETS platform.
0
0
